No matter how prepared you are for retirement, you can count on being blindsided by some unexpected expenses. According to a study by the Employee Benefit Research Institute, 40% of retirees said their retirement expenses are higher than expected.
Most people worry about costs like healthcare and taxes, but here are four potential retirement expenses you may not have thought about.
The divorce rate for Americans over 65 has almost tripled since 1990, according to Pew Research Center. The divorce rate for Americans 50 and older has doubled during that time. Remarried couples are twice as likely to divorce as those who only married once.
However, more long-term couples are also divorcing. Among all adults 50 and older who divorced in the past year, about one-third (34%) had been in their marriage for at least 30 years, including about one-in-10 (12%) who had been married for 40 years or more.
According to AOL Finance, the average cost of a litigated divorce is around $15,000. If contested, costs can swell to $50,000 or more.
Last year, thousands of retirees in Florida, Texas and California lost their homes or suffered significant damage due to hurricanes and wildfires. As if the traumatic events weren’t bad enough, many were stunned to learn their insurance policies didn’t cover these events, or only provided partial coverage.
Financial fraud is on the rise, affecting all Americans in the form of debit and credit card breaches, hackers who obtain information from credit bureaus like Equifax, malware designed to steal financial information, email scams, phone scams and more. Annual financial fraud losses for older Americans can reach as high as $36.5 billion, according to a 2015 study cited by the CFPB.
And according to an article in The New York Times, only a very small percentage of incidents are reported. One CFPB study out of New York State said that for every case of financial fraud that gets reported to law enforcement, adult protective services or a similar agency, 43 cases go unreported.
Another housing crisis
If profits from the sale of your home are an important part of your retirement savings, your plans could be derailed by another housing market crash. In 2008, for example, home values sank 18% in just one year. If the housing market is strong and you’re preparing to retire in a few years, it may be smart to sell your home early and downsize to your retirement home to maximize the value of that asset.